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Using "Quick Wins" to Justify Your Service Pricing

Posted by PriceBeam on May 12, 2017

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As we have previously pointed out, customers buy the value they get -- or more precisely, the value they perceive. If you are selling a product or service, one step to increase prices it to maximize the value customers get from it -- but maximizing value won't get you anywhere, if your customer doesn't see it, i.e. perceives it.
For some services, the value is fairly obvious -- e.g. if you go to a hairdresser, it is clear that the value you get is a new haircut. However, for many services the value is not as clear, especially those aiming to provide value in the long-run, and not just in the short-run. If a company hires a human resources consultant to optimize their recruiting process, this company will not see the value of this service before this recruiting pays off in terms of increased output of new hires. New hires have to be trained, gain experience etc., before they can truly start seeing the value they got from paying the consultant, which may take years.

This is very hard to comprehend for a customer, and so, it may be hard for him to see why he should pay such a high fee. This is where "quick wins" become important.
Quick wins are basically short-term benefits that arise from using a service. For the example with the HR consultant, this may be immediate HR cost reductions or immediate increases in number of applicants that the given company attracts.
Big consulting agencies such as McKinsey use them all the time to justify their high fees, and it has become a key part of the way they present solutions to clients.

There are two parts to using "quick wins": actually creating quick wins (part of maximizing the actual value of your service), but also communicating big wins (part of maximizing perceived value of your service). 
Creating quick wins should be embedded within the way you construct your service: you need short-term benefits to show to clients. Without them, you will lose out on substantial profit as the willingness to pay for a service which solely delivers long-term benefits will be significantly lower. Customers perceive a much higher risk when buying such a service; after all, if they don't actually get these benefits after x number of years, you will be long gone and so is the fee that you charged them.
With short-term benefits, i.e. quick wins, this risk is much smaller, and clients will feel more comfortable when they can see an immediate impact.

Communicating quick wins should play a key role in your customer value proposition. Even small ones should get attention when presenting your service to clients, also if it means leaving out larger long-term benefits. Typically, if pitching a solution to a client, the quick wins go first to build up to the long-term benefits, which, of course, should still be mentioned.

Eventually, you should see that clients will perceive your service to be much more valuable, and consequently, you can increase prices while the customers stay happy. 

Written by PriceBeam

PriceBeam
PriceBeam posts regular guides, articles and news related to pricing and strategy. Go have a look!